House approves pension borrowing plan

State Capitol Bureau

Monday

Jun 29, 2009 at 12:01 AMJun 29, 2009 at 5:54 PM

State lawmakers have advanced another piece of the difficult state budget puzzle, with time running short on an agreement. The House voted 101-7 Monday for Senate Bill 415, which frees up more than $2.2 billion in state money by borrowing against pension payments. The measure now heads to the Senate for consideration, and lawmakers are working toward some kind of budget solution by Tuesday.

State lawmakers have advanced another piece of the difficult state budget puzzle, with time running short on an agreement.

The House voted 101-7 Monday for Senate Bill 415, which frees up more than $2.2 billion in state money by borrowing against pension payments. The measure now heads to the Senate for consideration, and lawmakers are working toward some kind of budget solution by tomorrow.

Essentially, the state will cut the more than $4 billion payment it was supposed to make next year by about in half through borrowing money, then will pay off that borrowed money over five years. The freed-up cash would then be used to reduce major cuts facing social service providers if lawmakers don't approve more revenue soon.

"Some of those cuts will not be made because of this money," said Rep. Kevin McCarthy, D-Orland Park.

Some lawmakers said they were nervous about voting to raise money by borrowing against future payments - and thus raising debt costs in the future. But they said given the choices, this idea makes sense.